Tci Revival Plan Not Final, Rules Calcutta Appellate

Tyre Corporation of India Ltd, the ailing Government of India enterprise, will not be able to proceed with its rehabilitation programme as the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) has ruled the package proposed by the Board of Industrial and Financial Reconstruction (BIFR) as a draft scheme.

The decision to treat the package as a draft scheme was passed on February 7. A notice has been sent to all agencies, who will be paying for the companys rehabilitation, that within 60 days they will have to give their consent or otherwise for the rehabilitation package.

D N Bannerjea, the chairman-cum-managing director of the company, speaking to Business Standard said: Only after the consent is given will it become a sanctioned scheme.

 

Tyre Corporation of India has two units, one in Kankinara which deals in tyres and the other in Tangra which deals in industrial rubber.

The scheme entails a modernisation programme in the tyre division which would require an investment of Rs 125 crore. The government has agreed to give us Rs 125 crore for our tyre unit, but it is on the industrial rubber unit that the government has reservations about investing, said Bannerjea.

He further added that previously banks like the Allahabad Bank, Canara Bank and Uco Bank were prepared to give the company working capital up to Rs 35 crore. But now with the government showing reservations, the banks are also wondering as to why they should stick their necks out for this ailing company, said Bannerjea.

Tyre Corporation of India was referred to the BIFR in 1992. In February 1996, the BIFR package was made, and in April of the same year the government made its appeal to the AAIFR.